Those Things You Might Not See, Which Are Still Beneficial

Abstract

The euro area is slowly exiting a deep and prolonged economic, financial, institutional and confidence crisis. Several reforms and adjustment processes are underway. An aspect that is often neglected in this difficult period is that European integration has an “engine” which has withstood the crisis: over the last 60 years there has been a continuing deepening of trade in goods and services, foreign direct investment and financial links across EU countries. Such EU Internal Market is a diffused process advancing slowly but steadily, while generating a stream of benefits (with a caveat during the crisis). Four new components of the internal market are under way and are briefly introduced in this chapter. They are: the EU’s Digital Agenda, the Capital Market Union (CMU), the Payment System Directive (PSD), and Target-to-Securities (T2S). These elements are quite ambitious in their respective domains and need to be completed, understood, and widely adopted to exert their benefits, and boost the benefits from the euro. This is a big change in culture that is also supporting the change in EMU governance and political economy under way.

Thanks to Kris van De Velde, Monika Hartmann, Michaela Posch, Jean-Francois Jamet, Christine Haas, and participants to a panel on “The Future of European Internal Market and Integration” at the June 2015 XXVII Villa Mondragone International Economic Seminar “Capitalism in the 21st Century: Stagnation versus Growth in Europe?” for their inputs and comments. We are responsible for any error, and the views in this presentation do not necessarily reflect those of the ECB.